Does Commercial Microfinance Belong to the Financial Sector? Lessons from the Stock Market

Abstract

This paper is the first to draw a global picture of worldwide microfinance equity by taking full advantage of daily quoted prices. We revisit previous findings showing that investors should consider microfinance as a self-standing sector. Our results are threefold. First, microfinance has become less risky and more closely correlated with the financial sector. This convergence is associated with a decline in the proportion of women borrowers. Second, microfinance and finance shares have equivalent currency exposure. Last, introducing a self-standing microfinance sector presents few diversification benefits. This paper confirms that microfinance has changed dramatically during the last decade.

Women Leaders and Social Performance: Evidence from Financial Cooperatives in Senegal

“…In microfinance, issuing codes of ethics is common practice (Kleynjans and Hudon, 2014). Another concern relates to the availability of 32 Brière and Szafarz (2015) mention that the convergence of microfinance toward mainstream finance can be accompanied by a reduction in the proportion of female borrowers served.…”

Gender, Microcredit and Poverty Alleviation in a Developing Country: The Case of Women Entrepreneurs in Pakistan

“…Despite being badges as ‘gender‐neutral’, MFIs' core clients are relatively immobile, poor women who tend to have lower default rates than men (Lucy, Ghosh, & Kujawa, ); MFIs' interventions have significant but underreported economic impacts (Ardener, ; Van Rooyen, Stewart, & De Wet, ) as women work within households, are often unremunerated and accumulate limited start‐up capital (if any). MFIs have become increasingly risk averse and ‘financialised’, that is, they have become more like mainstream financial institutions (Brière & Szafarz, ). Nonetheless, MFIs do in some cases support women to establish new business ventures and, therefore, alleviate their poverty, but not universally.…”

Funding Strategy and Performance of Microfinance Institutions: An Exploratory Study

“…As for MFI financial characteristics, we use three measures of performance: return on assets , operational self‐sufficiency , and profit margin . We measure social performance by four indicators widely used in the microfinance literature (Brière and Szafarz, ; Cull et al ., ; Tchakoute Tchuigoua, ): average loan size per borrower , outreach (measured by the number of active borrowers), interest rate charged on loans (proxied by the real yield on a loan portfolio), and share of female borrowers (measured by the percentage of women borrowers). Table summarizes the variables used in the study.…”